Did no-one spot that Britain is leaving the EU in five years' time?

It didn't get much attention but a draft European treaty leaked last week maps out a course that, if

Despite the twin facts that European Union affairs came to dominate political news towards the end of last year and the eurozone crisis remains the single most important factor in deciding whether or not the UK economy can recover in 2012, Britain - or rather the British media - just don't seem to be able to sustain in interest in the EU for very long.

Most of the political coverage and commentary in the weekend just passed has focused on two themes: the troubles with Ed Miliband's leadership and David Cameron's ambitions to occupy the electorally popular terrain of moral outrage at the excesses of freewheeling capitalism.

Hardly anyone seems to have noticed or picked up on an extraordinary scoop on Friday by ITV business correspondent Laura Kuenssberg - a draft copy of the proposed new treaty for Eurozone members and their fellow EU travellers. This, remember, is the document that David Cameron will not sign. Its very existence rather contradicts the established story that the prime minister somehow wielded a "veto", since - as has subsequently been noted on a number of occasions - a veto prevents something from happening. And yet here, the other 26 members of the Union are pressing ahead with their plans unimpeded by grumpy Britain.

And, as Evan Davis successfully established in his interview with Cameron on Friday, the fact of the UK's exclusion doesn't actually guarantee any of the safeguards for the British financial services industry, procurement of which was the ostensible motive for wielding a "veto" in the first place.

Of course, the document revealed last week is just the starting point for negotiations. There is a European summit due at the end of this month when the real work of putting a new treaty together will get under way. How much influence Cameron will have over that process is an open question - as is the matter of how much leeway his party will give him to inch back towards a slightly more cooperative stance (as Nick Clegg insists ought to be the case). One thing helping Cameron is the fact that several of the proposed signatories to the euro-plus pact share Britain's concerns about a hardcore fiscal union run, essentially, by Paris and Berlin. The 26 v 1 scenario that emerged at the end of last year masks more subtle diplomatic manoeuvres as negotiations around an actual treaty proceed.

Still, the outcome is looking very tricky indeed for Cameron.

Here are just a few paragraphs that stand out from the draft treaty (written, as usual, in the arcane jargon of European legal documents):

The Contracting Parties undertake to work jointly towards an economic policy fostering the smooth functioning of the Economic and Monetary Union and economic growth through enhanced convergence and competitiveness. In this context, particular attention shall be paid to all developments which, if allowed to persist, might threaten stability, competitiveness and future growth and job creation. To this aim, they will take all necessary actions, including through the Euro Plus Pact.

That sounds a lot as if the inner core of EU members that sign up to the treaty (i.e. not Britain) will be talking on a regular basis about all sorts of economic plans that cut across the wider single market. The idea of the europlus group hatching a "competitiveness" agenda without consulting London will be completely unacceptable to the UK.

With a view to benchmarking best practices, the Contracting Parties ensure that all major economic policy reforms that they plan to undertake will be discussed ex-ante and, where appropriate, coordinated among themselves. This coordination shall involve the institutions of the European Union as required by the law of the Union.

So that confirms it - the euro-plus group will set the economic agenda for the whole EU in advance of Brussels summits and then railroad their plans through the Council.

The President of the Euro Summit shall keep the other Member States of the European Union closely informed of the preparation and outcome of the Euro Summit meetings.

Britain will be allowed to find out what has been arranged in her absence and invited to agree.

Within five years at most following the entry into force of this Treaty, on the basis of an assessment of the experience with its implementation, an initiative shall be launched, in compliance with the provisions of the Treaty on the European Union and the Treaty on the Functioning of the European Union, with the aim of incorporating the substance of this Treaty into the legal framework of the European Union.

And eventually - in the not too distant future - whatever grand new economic schemes have been settled by all of the signatories to the new treaty will be presented to the non-signatories as a fait accompli and turned into a new pan-EU treaty after all. At that point Britain will have to sign up (having had minimal input) on a take it or leave it basis. It is very hard to see any government agreeing to that, let alone parliament ratifying it, whoever is running the government by 2017.

In other words, this draft treaty sets up a framework and a timetable for the evolution of European economic policy as mediated by EU institutions that, if not substantially amended, all but guarantees Britain's departure from the Union. Not long ago it was scarcely thinkable; a distant hope for the most hardline sceptics. Now it's all queued up to happen in five years' time. It is odd, to say the least, that this didn't get more coverage over the weekend.

 

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Getty Images.
Show Hide image

Brexit is teaching the UK that it needs immigrants

Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past.

Why did the UK vote to leave the EU? For conservatives, Brexit was about regaining parliamentary sovereignty. For socialists it was about escaping the single market. For still more it was a chance to punish David Cameron and George Osborne. But supreme among the causes was the desire to reduce immigration.

For years, as the government repeatedly missed its target to limit net migration to "tens of thousands", the EU provided a convenient scapegoat. The free movement of people allegedly made this ambition unachievable (even as non-European migration oustripped that from the continent). When Cameron, the author of the target, was later forced to argue that the price of leaving the EU was nevertheless too great, voters were unsurprisingly unconvinced.

But though the Leave campaign vowed to gain "control" of immigration, it was careful never to set a formal target. As many of its senior figures knew, reducing net migration to "tens of thousands" a year would come at an economic price (immigrants make a net fiscal contribution of £7bn a year). An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent. For the UK, with its poor productivity and sub-par infrastructure, immigration has long been an economic boon. 

When Theresa May became Prime Minister, some cabinet members hoped that she would abolish the net migration target in a "Nixon goes to China" moment. But rather than retreating, the former Home Secretary doubled down. She regards the target as essential on both political and policy grounds (and has rejected pleas to exempt foreign students). But though the same goal endures, Brexit is forcing ministers to reveal a rarely spoken truth: Britain needs immigrants.

Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. On last night's Question Time, Brexit secretary David Davis conceded that immigration woud not invariably fall following Brexit. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (while sounding rather unconvinced), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

The UK’s vote to leave the EU – and May’s decision to pursue a "hard Brexit" – has deprived the government of a convenient alibi for high immigration. Finally forced to confront the economic consequences of low migration, ministers are abandoning the easy rhetoric of the past. Brexit may have been caused by the supposed costs of immigration but it is becoming an education in its benefits.

George Eaton is political editor of the New Statesman.